When the shoe was on the other foot (A suggestion for Chinese trade negotiators)

By Scott Sumner

SHARE
POST:

US trade negotiators complain that China is stealing or borrowing Western inventions without sufficient compensation. How might the Chinese negotiators respond?

Here’s my suggestion. The Chinese might want to ask how much China has been compensated for its inventions. How much did the West pay China for the secret to making gunpowder? How much did the West pay China for the compass? How much did the West pay for the secret to making silk? How much did the West pay for invention of paper? How much did the West pay for the moveable-type printing press? How much for the secret to making porcelain?

Of course the answer is always zero. These ideas were either stolen or borrowed from China, with no compensation. Perhaps we could pay China 1 cent for each sheet of paper used in the West, for a period of 17 years.

I understand that today there are many more inventions going in the other direction. Even so, these Chinese breakthroughs were not in areas of trivial importance. The ability to win wars, to explore the world, and to disseminate ideas via cheap books played a big role in the West rising to global domination in the centuries after 1450. A domination that allowed the British to makes lots of money selling opium to the Chinese.

And note that the Chinese do pay some money to Western firms like Apple and Microsoft. The West paid precisely zero for these key Chinese inventions.

Feb 18 2019 at 2:45pm

Feb 14 2019 at 8:43pm

Surprised you appear to be falling for the composition fallacy.

“China” didn’t invent any of those things, just like the “West” (or America) didn’t invent the things people may be currently complaining about. Specific individuals, or at most a particular group effort did.

So certainly, dig up Cai Lun’s heirs (assuming you can identify them) and reward them for the invention of paper to the extent required by whatever the actual agreements made between the nations involved require. In turn, hold China to the treaties it has agreed to in regards to protection of IP grants.

A legitimate complaint against China would be that it’s not living up to the agreements it’s made. If it’s trading partners are living up to what’s contained in those same agreements, then it’s not hypocritical of them to point that out. If China doesn’t want to follow those agreements, then it shouldn’t make them and/or openly repudiate them, rather than saying they’ll follow them in exchange for other benefits, but secretly ignore them in some cases.

Obviously, if negotiators are complaining about “violations” which are not covered by anything China already agreed to, then they aren’t actually violations.

Cliff

Feb 14 2019 at 11:55pm

Are these actually instances in which the West stole secret inventions from Chinese owners, or were they developed independently or through reverse engineering (totally okay, of course)? Is the objection that the Chinese are breaking into computer systems and stealing trade secrets?

Scott Sumner

Feb 15 2019 at 12:05am

Thomas, You said:

“A legitimate complaint against China would be that it’s not living up to the agreements it’s made.”

That’s a legitimate complaint against both the US and China.

Cliff, In some cases they were stolen. I’d add that the US does not regard reverse engineering US inventions to be acceptable.

Thaomas

Feb 15 2019 at 9:46am

I think the legitimate beef that the US — and its non-partners in the TPP — have with Chinese commercial practices is that “forced” technology transfer is not just a negotiation between two firms. The Chinese state implicitly disallows (some) investments that do not transfer technology. In effect it is a trade and investment barrier that it is in the interests of other governments to wish to see removed.

Of course to say that it is a legitimate beef does not imply that it is worth risking all of the enormous benefits of US-China trade. And the legitimate beef is obscured by talk of the bilateral trade balance.

Plato’s Revenge

Feb 17 2019 at 3:41am

porcelain wasn’t stolen or reverse engineered in any meaningful way. Neither was, to my knowledge, the printing press. Developing Pepsi cola because Coke is successful is not reverse engineering, it’s legitimate competition (even within the US).

The secret to making silk is having silk worms. It is true that Europeans smuggled silk worms out of China, but this doesn’t sound like a punishable offense from a modern point of view

I understand (hope) your post is tongue in cheek, but still, I’d have expected stronger examples. In any case, Europeans have committed much worse offenses than some IP theft to most of the world…

Scott Sumner

Feb 17 2019 at 12:34pm

Plato, I disagree. I believe that many ideas were stolen from China, including the secret to making porcelain. The Chinese worked hard to keep their inventions secret, but western spies stole many ideas from China. They preferred to steal the ideas rather than pay for them.

It’s important to look beyond technicalities like patent laws, which are a western idea, and consider the underlying offense.

I agree that this was a less serious offense that many other things done by the Europeans, and would argue that goes both ways. Chinese theft of western IP is a problem, but a very small one.

Comments are closed.

SHARE
POST:

Enter your email address to subscribe to our monthly newsletter:

RELATED
CONTENT By Stan Liebowitz

Intellectual Property

Intellectual property is normally defined as the set of products protected under laws associated with copyright, patent, trademark, industrial design, and trade secrets. The U.S. Constitution expressly allows for intellectual property protection, albeit for a limited time, in the form of protection of “writings and discoveries” in order to promote “science and useful arts.” This article focuses on the two most important categories: copyright and patent law.
Copyright, whic...